Campus Sexual Assault Can Cost Universities Millions

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On June 8, former Penn State student James Vivenzio filed a complaint in Pennsylvania court alleging his fraternity was responsible for hazing and sexually abusive activities. Among other things, he alleges the fraternity chapter of Kappa Delta Rho maintained a Facebook page with photos of drunk and unconscious nude women, some of whom looked like they were being sexually assaulted. Fraternity pledges were given alcohol and sometimes drugs to facilitate sexual assault and abuse, the complaint alleges.

Vivenzio isn’t only suing his fraternity—he’s suing Penn State for failing to act “quickly, responsibly and decisively” after he allegedly told a Penn State administrator about the incidents over a year earlier, in April 2014.

Penn State strongly disputes the allegations, and the chapter could not be reached for comment.

Meanwhile, Penn State conducted a sexual assault task force this past academic year to examine how the school can better address sexual assault. The result was a public 267-page report presented in January that outline 18 recommendations, such as enhancing resources at the university’s smaller campuses and administering a campus climate survey on sexual assault. All were accepted in full by University President Eric Barron, who took the post in May 2014.

Over the past five years, the issue of campus sexual assault has created a firestorm of controversy and political discussion across the nation. How universities punish students responsible for sexual assault, the definition of consent on college campuses and the reliability of accusers have been called into question. As universities face intense scrutiny for their handling of sexual assault, the cost of accusations, formal charges and prevention measures is skyrocketing.

“In our world, often times money does talk,” says Vivenzio’s lawyer, Aaron Freiwald. “Whether there’s a real commitment to curbing sexual assault is going to be measured in part by the resources [Penn State] is prepared to commit to it. Right now, they're words on a page.”

Vivenzio isn’t asking for a specific dollar amount, but other high profile sexual assault cases suggest losing could cost Penn State anywhere from thousands to millions of dollars.

The Right Incentives

Anecdotally, universities have faced reputational damage from sexual assault scandals, in the form of fewer alumni donations and fewer interested or qualified applicants. After the University of Virginia faced the controversy of a discredited Rolling Stone article alleging a campus gang-rape, the number of undergraduate applicants dropped for the first time in 12 years. Dartmouth College experienced a 14% drop in applications in 2014 following student outcry over the school’s handling of campus sexual harassment and hazing. Both schools have said that reasons for the declines are unclear.

Outspoken politicians and experts have argued that universities may hide or minimize sexual assault claims to avoid damaging their reputations. A bipartisan group of senators unveiled the Campus Accountability & Safety Act to Congress in February, which would fine schools up to $150,000 if they fail to submit detailed sexual violence reports. Universities that don’t comply with the bill could be fined up to 1% of the school’s operating budget.

Currently, the DOE’s only penalty for violating Title IX, which prohibits sex discrimination in education, is withdrawing an unspecified amount of federal funding from an institution. That’s not something to shrug off. The DOE provides $47 billion in grants for postsecondary education a year, along with $101.5 billion in loans, $978 million in work-study, $44.4 billion in institutional grants and $20.3 billion in tax benefits, according to a College Board student aid review.

The DOE is now conducting Title IX investigations for 126 schools including Penn State. It has not pulled funding from any of the universities it has investigated since publicly putting schools on notice in 2011, a DOE spokesperson said.

“We have consistently said we welcome scrutiny and welcome any recommendations [from the DOE],” says Peggy Lorah, director of Penn State’s Center for Women Students. “It can only help us learn and grow.”

Sexual assault at college and universities has serious consequences, including financial costs. Severe reputational blows and high litigation fees can cost a school millions, not to mention possible funding cuts from the Department of Education for violating Title IX. Meanwhile, institutions are beefing up their prevention programs with entire offices devoted to the issue of sexual assault.

There are a growing number of people who believe the DOE is creating an overcorrection problem — claiming that schools have become so afraid of facing DOE cuts that they are willing to unjustly kick the accused out of school. At both Harvard University and the University of Pennsylvania, law faculty submitted letters to school administrators condemning new sexual violence policies that use the lowest possible burden of proof in sexual violence cases – a preponderance of evidence standard – which is required by the DOE.

“With pressure from the government, institutions walk a fine line of doing something at the mere sign of an allegation and sometimes going over and beyond what is necessary to be fair to the accused,” says Los Angeles Criminal Defense Attorney Peter Berlin, an expert in consent issues.

Liability and Litigation

In July 2014, the University of Connecticut settled a federal sexual assault lawsuit for $1.3 million, one of the highest-ever reported sexual assault settlements. A single student, who says she was cut from the hockey team after being raped by a male hockey player her freshman year, was awarded $900,000.

The school didn’t accept any wrongdoing, but settled the case because “no good would have come from dragging this out for years as it consumed the time, attention and resources — both financial and emotional — of everyone involved,” Lawrence D. McHugh, the chairman of the school’s board of trustees, said in a statement at the time.

Universities can easily face six figure payouts if sued for mishandling sexual assault cases.In recent years, institutions have started paying for insurance to cover these sexual assault payouts. United Educators, the higher education insurance group owned by its 1,200 member institutions,paid out $36 million between 2006 and 2010 for 262 sexual assault cases on behalf of universities. Seventy-two percent of the payouts went to those who sued universities after being accused of sexual assault.

“The government is creating a hyper-vigilant enforcement environment right now,” says Scott Coffina, former associate counsel for President George W. Bush, who has conducted independent investigations into universities for how they handle sexual assault accusations. “The cost of schools hiring more people and devoting more resources to outing sexual assault is that schools are now experiencing a major uptick in accused students suing them, almost as an appeal of mishandling the cases against them.”

Penn State Men Against Violence, in partnership with the Center for Women Students, hosted the fifth annual 'Walk a Mile in Her Shoes' event at Penn State on April 9. Photo: Patrick Mansell, Penn State News and Media Relations

Universities go about different ways of addressing sexual assault litigation, and for the most part keep their methods private. Some have their own counsel handle the suits, while others hire outside experts, a cost which can rise rapidly once a lawsuit is filed.

The most costly cases are ones brought to trial, which are rare because of the time and effort they take. For Penn State, though, attorney Freiwald suggests they might need to expect it.

“We didn’t file a lawsuit to get them to settle," Freiwald says.

New Preventative Measures

If Penn State follows through with the sexual assault task force recommendations, its new Title IX office will staff a Title IX Coordinator, an investigator, a Prevention and Education Coordinator and a Deputy Coordinator for Penn State’s Commonwealth Campuses, plus “other staff and funding sufficient to effectively manage the many obligations at all Penn State locations,” the recommendations say.

On average, Penn State pays “Student Affairs” employees – under which the new Title IX coordinator position falls – $83,416 a year. Salaries for the whole staff will easily cost a six figure value.

But the devotion of one office isn’t necessarily enough. “The work of the Title IX coordinator needs to be effective. Everyone in the school is involved and must be trained,”says Lisa Banks, who has litigated Title IX cases against universities, settling one case for $825,000.“It can’t just be left to title IX coordinator.”

April marks Penn State’s Sexual Assault Awareness Month. There were self-defense classes, educational speakers, marches and workshops. And as the number of prevention programs like this is increasing, so is the cost to universities.

“Internal costs should exist because colleges and universities should have a robust system in place to train students, faculty and staff about these issues,” Banks says. “They need to have a system set up whereby victims can be supported.”